Piracy is a big problem for large software vendors licensors like Microsoft. As such, the Redmond giant is undertaking several anti-piracy efforts all over the world, and, of course, it attempts to make its software harder to crack through activation and validation. As The New York Times has discovered, however, the prevalence of pirated Microsoft software in Russia is giving the Russian authorities a pretence to raid the offices of outspoken advocacy groups or opposition media - supported by Microsoft lawyers. Update:Microsoft responds with a blog post that says all the right things, including "Microsoft will create a new unilateral software license for NGOs that will ensure they have free, legal copies of our products."

If a (closed) software company were to plot a curve according to the percentage of piracy of its products along the x-axis vs the "benefits" of piracy on the y-axis, the resulting curve wouldn't be constantly rising (i.e., the more piracy there is, the better for the company). I'm guessing that the curve would be "bell" shaped, and the "bell" would be lopsided since 0% piracy wouldn't result in zero-profit, while 100% piracy would result in zero-profit (unless you go with the "we rely on selling support for all our funds" malarky). I suspect that the peak of the curve would be closer to x=0% piracy than to x=100% piracy. I'm guessing that 15% to 25% piracy would be optimal. Anything beyond that begins to hurt the company.

But I'm only guessing at what the optimal piracy rate actually is. I think it also depends on the software in question. For video games, for example, I think the optimal piracy rate is likely to be lower than it would be for operating systems or office suites. For pirated movies, I think the optimal piracy rate would be pretty close to zero. For music, I'd guess piracy rate of 5% for any given artist would be optimal (i.e. someone pirates just enough music to become a fan of the artist, then buys legit copies from then on). Something like Photoshop, I don't think is affected much at all by casual piracy, but would hurt Adobe severely if professional art departments engaged in large scale piracy of that product.